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Finding the Balance Between Taxes and Services

THUNDER BAY, ONTARIO  ------  January 24, 2015  -----  In recent weeks, we have heard numerous warnings from city officials about the Charla Robinsondifficult budget choices that lie ahead as Council reviews the 2015 buThunder Bay Chamber of Commerce Lake Superior Newsdget.  2014 expenses are projected to be over-budget by $4.4 million on the heels of an $8 million deficit in 2013.   For 2015, there are indications that the city is facing reduced tax revenues due to assessment appeals plus a reduction in direct Ontario government funding by about $1.5 million.  The Provincial Government’s fiscal challenges will be even more keenly felt here in Thunder Bay should they result in further funding cuts in our community.

There are no magic potions when it comes to balancing the books whether in business, personal or government settings.  Three choices are available regardless of the size of budget: increase revenues; reduce expenses; or, a combination of both.  Finding the right balance requires a focused effort and difficult decisions.

The BMA Municipal Study 20131  classifies both Thunder Bay’s property taxes and the total municipal and property tax burden as a percentage of income as “high”.  The study also indicates that for communities of greater than 100,000 population residential, motel, and standard industrial taxes are lower than average, while commercial office building, neighbourhood shopping, hotel, and large industrial are above average.  We recognize and appreciate that both Council and the Province have worked to reduce business taxes in recent years.  The City has also taken steps in the past 4 years to address infrastructure concerns by investing an additional portion of tax revenues in this area.

What impact will a significant residential tax increase (more than 3%) have on the ability of fixed income residents to stay in their homes?  Will a similar increase in commercial and industrial taxes force business owners to cut jobs or relocate to more competitive jurisdictions?   These are questions that must be considered in determining what is best for the community.

The Chamber of Commerce believes that it is vital for the growth of our city and the overall health of our community for City Council to look at the expense side of the ledger for solutions. This is a problem we face as a community and we at the Chamber want to work with Council to find ways to deal with these challenges.  It is essential that taxpayer dollars are used efficiently so that citizens and businesses have access to the vital municipal services that they require.  We recommend that a Core Services Review be completed to identify what city services are mandated and which are not.  Once identified, non-core services must then be carefully examined one-by-one to evaluate whether these services should continue to be provided by the City (ie: does it meet a need that is not being met by the private sector?) and if so, how operating costs to taxpayers can be reduced.  

Thunder Bay Chamber of Commerce Tax Paid Summary 

Cutting expenses should not be assumed to result in service reductions.  The private and public sector provide examples of creative service delivery changes that have simultaneously reduced costs and improved services.  Innovation and cost control are not mutually exclusive and both must be included in budget deliberations if Thunder Bay is to be competitively positioned for future growth.
City Council has been elected to make these difficult decisions on our behalf; however, they need YOUR input to help them find the right balance between tax increases and cost reductions.  The Chamber will be meeting with members of Council over the coming weeks.  Your feedback on the questions below will help us ensure that the voice of business speaks clearly.

1.   How would a significant tax increase (more than 3%) affect your business?
2.   What services or supports can your business provide to help the City reduce their expenses?  

We encourage all Chamber members to share your feedback, ideas and solutions with us by email:  You may also wish to share your thoughts directly with members of City Council by email or letter, or with the general community through a letter to the editor of a local newspaper.

1 pages 267-404

Charla Robinson
Thunder Bay Chamber of Commerce








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